BostonSportsHub provides a breakdown of how the NCAA bracket has performed by seed going back to 1997:
The first step in filling out your bracket is to understand the importance of seeding. Unless you are a complete novice to the religion that is March Madness, you know that in general the better the seed, the better the team. There are of course exceptions to this rule. At times the committee loses its mind, but in general the seeding is a fairly accurate representation of the quality of the teams. Here is how the seeds have performed on a round by round basis since 1997.
Round One: Winning Percentages by Seed
Until you get to the 5 seed, upsets are rare.
Round Two (To the Sweet 16): Winning Percentages by Seed
One seeds rarely lose, but upsets are pretty common two seeds and out
Round Three (To the Elite Eight): Percent that Get Through by Seed
One seeds keep rocking, while a four seed is almost as unlikely as an eight seed to get through.
Round Four (To the Final Four): Percent that Make Up the Final Four
Taking the unlikely "flyer" this far yields minimal results.
So, everyone should just take the #1 seed right? If the goal was to get the least number wrong... sure. BUT, the goal is to outperform everyone else. Which is why your co-worker's eight year old is sure to win your office pool.
Lots of other cool stats over at BostonSportsHub
For those that really want to geek out, here is a table of all seed matchups going back the last 27 years pulled from mcubed.net.